Public sector accounts have a positive surprise in November and record surplus for the year

The Brazilian consolidated public sector registered a primary surplus of BRL 15.034 billion in November, which took the accumulated figure in 12 months to positive territory for the first time in the year, with a balance of BRL 12.767 billion, equivalent to 0.15% of the GDP (Gross Domestic Product), informed the Central Bank this Thursday (30).

The November data is the best for the month since 2013, when there was a surplus of R$ 29.8 billion. The result came far above market expectations. A Reuters poll pointed to a primary surplus of R$4.775 billion in the month.

In November, the result of the public sector was mainly driven by data from States and municipalities, with surpluses of R$ 11.743 billion.

Data from the central government —federal government, Central Bank and INSS—, in turn, show a surplus of R$ 3.529 billion.

On Wednesday (29), the Treasury had already announced that the performance of the federal government was boosted by an increase in tax collection and a reduction in expenses.

State-owned companies were in the red in November, with a deficit of R$ 238 million.

In the first eleven months of the year, the consolidated public sector registered a surplus of BRL 64.604 billion, compared to a historical loss of BRL 702.950 billion in the same period last year, achieved amid extraordinary expenses that were made to fight the pandemic of Covid-19.

The year’s data was pushed by rising inflation, which raises tax revenues and gains from oil royalties. The government has argued, however, that part of the result is structural, with high real tax collections.

On the revenue side, the reduction in measures to fight the pandemic and the salary freeze of public servants weighed on the account, which also benefited the finances of regional governments.

Also according to BC, the country’s net debt was 57.0% of GDP in November, against market expectations of 57.8%. In the previous month, it was at 57.1%. Gross debt, in turn, was 81.1% of GDP, compared to 82.3% in October.